1. Field of the Invention
The present disclosure relates generally to the field of data processing for accounting data. Specifically presented are methods and systems for formulating reverse accounting entries to account for journal entries in a deleted journal using a web service.
2. Description of the Related Art
In accounting, a “general ledger” (GL) is one of the main financial records of a business. The general ledger includes more or less all of the accounts which are reported on the business' financial statements, such as cash, accounts payable, and expense accounts. Each ledger in the general ledger typically keeps a balance, or the running total of money, in each account for which the business wishes to track.
Large enterprises often have complex financial systems to track their general ledgers, including accounting entries. Oftentimes these systems are composed of more than one piece of computer software to facilitate accounting entry or line creation and, ultimately, the posting of the lines to journals. Enterprises may employ, for example, an information technology system that performs specialized tasks specific to the organization or perhaps the industry.
In one example, a specialized system such as a Financials Accounting Hub (FAH) uses a rules-based engine to create accounting line transactions for numerous other specialized source systems. Entities in the financials services industry utilize the financials accounting hub to aggregate source transaction information from other specialized systems that handle insurance claims, retail banking, online banking, brokerage transactions, etc. To continue the transaction flow, the accounting lines that are created from the financials accounting hub could then be sent to an Enterprise Resource Planning (ERP) General Ledger (GL) system, such as PeopleSoft® Enterprise General Ledger, that processes the accounting lines and creates journals.
Often, a program within the ERP GL system takes the accounting lines generated by the financials accounting hub and utilizes the existing ERP GL setup and configuration to validate the accounting lines. For example, for the accounting lines to be properly processed into journals, they should balance, be accounted for in open periods, and have a valid combination of the chart of accounts.
In some more advanced implementations of these systems, systems integrators may build customized solutions between the numerous systems to synchronize the master ERP GL setup data to the financials accounting hub to ensure that the accounting entries that are created are valid. However even in the fastest and most sophisticated systems, the setup data can have some latency in being synchronized across the systems. Also, the setup data risk being modified in the ERP GL system prior to the journal being posted.
One example of where discrepancies can enter the system is if an accounting period is closed in the ERP GL after the transaction is accounted and transferred from the financials accounting hub—but before posting in PeopleSoft® General Ledger. Thus, it may be necessary to delete the journal in order to, in effect, remove the journal that is not valid.
In such a case the financials accounting hub, or the system that creates accounting lines from source systems, often needs to be corrected. Each accounting line may need to be modified to fall into an open period because the period of the existing accounting lines has been closed. In order to accomplish such a task, an accounting clerk typically manually identifies all of the source accounting entries in one system such as the financials accounting hub, that correspond to the journal requiring correction in the other system, such as the PeopleSoft® General Ledger. This can be a manually arduous task to identify all of the original transactions that are associated with this journal. After the accounting clerk analyzes the journal and manually records the details from the GL ERP that identify the source transaction, the clerk then leaves the GL ERP and logs in to the financials accounting hub. At this point the clerk typically needs to identify the manually-noted incorrect accounting entries and create manual transactions that reverse the previously integrated accounting entries. This process is followed so that audit trails are maintained.
Accounting entries often cannot simply be removed from the system. Reversal or deleting of GL journals are not automatically coordinated with the reversal of sub-ledger accounting entries. This is error-prone and increases the possibility of accounting data being lost or unaccounted for. Additionally, reversing the accounting entries to net to zero with the original lines with an incorrect accounting period would commonly need to be marked for sending to the ERP GL. Once the accounting entries have been corrected and the original lines netted to zero, the accounting clerk could add new accounting lines to again be sent to the ERP GL for the originally intended transaction.
As apparent from the above description, the manual steps that are commonly employed to correct the data from financials account hub are prone to error and can be tedious. An improved method and system for deleting journals and formulating reverse accounting entries is desired.